Thailand’s renewable energy policy unsuccessful

[greenwoodsolar]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

[ratcatcher]

I predict a serious energy and sudden blackout crisis BESIDES the upcoming floods AND other natural disasters, because the Thai-Chinese feudal brigade didn't prepare in advance and keep borrowing energy resources etc., from Fakang land,...

... And if one day, no energy nation wide, blame the Falang AND the taxpayer public for wasting too much energy...

"...........keep borrowing energy resources etc., from Fakang land,..."

Even though I'm married to a Thai, I'm not allowed to own any fakang land.

[Tarric]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

There in lies the problem, the amount of red tape and general bullshit you have to go through to get the licensing and required permissions is enormous. Anecdotally I know 3 solar farm projects totalling over 2 Megawatt's that are literally siting there complete and ready to generate power yet they are still waiting on the red tape permissions from the government and relevant authorities.

I know quite a few people that are very keen on investing in the solar industry both throuh farms and the roof top schemes but they have been scared away by the red tape and there being no clear timeline for the completion of projects.

[JRSoul]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

Isn't that wonderful! EGAT will pay around 3 times what it is worth for energy from those rich enough to afford solar panels, and of course the rate paid by the poor and everybody else will increase (around 20% quoted??) to pay for it.

BTW if the plan was for 100 milliwatts, I wouldn't mind, 100MW is a different matter.

Edited January 1, 2014 by JRSoul

[MJP]

Weren't there plans for a nuclear power station?

A nuclear power station, managed by Thai workers?

don't you think it may be a bit risky?

Let's hope the IAEA and the UN have a full understanding of the issues involved.

No way should a country such as Thailand have nuclear energy with its ingrained culture of face saving and being as politically unstable as it is. Just no way.

[greenwoodsolar]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

Isn't that wonderful! EGAT will pay around 3 times what it is worth for energy from those rich enough to afford solar panels, and of course the rate paid by the poor and everybody else will increase (around 20% quoted??) to pay for it.

BTW if the plan was for 100 milliwatts, I wouldn't mind, 100MW is a different matter.

Pretty dim response. Not sure how 6.96 becomes 3 times 3.8, to use the lower figure. The householder pays for the panels and their installation, so there is no investment by the government in new infrastructure, no new power plant, no emissions in the 25 years (over and above those from the initial manufacturing process). The price rise is coming and has nothing to do with any solar scheme. Thailand's reserves of natural gas, that the current generating capacity is built around, are running out. Over the next two years they will have to switch to purchasing gas on the open market. At current prices their costs will at least double, hence EGAT stating in 2013 that prices will rise by about 35% over the next two years. The price rise will almost certainly be less dramatic than that, but this will be by way of subsidy, not based on the true cost.

BTW The implication that the poor are somehow subsidizing the rich in their use of power is very wide of the mark. In the residential market larger users of power pay a progressively higher price based on usage. This higher rate subsidises the ability of EGAT to charge very low rates to low usage consumers.

[airconsult]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

Isn't that wonderful! EGAT will pay around 3 times what it is worth for energy from those rich enough to afford solar panels, and of course the rate paid by the poor and everybody else will increase (around 20% quoted??) to pay for it.

BTW if the plan was for 100 milliwatts, I wouldn't mind, 100MW is a different matter.

Pretty dim response. Not sure how 6.96 becomes 3 times 3.8, to use the lower figure. The householder pays for the panels and their installation, so there is no investment by the government in new infrastructure, no new power plant, no emissions in the 25 years (over and above those from the initial manufacturing process). The price rise is coming and has nothing to do with any solar scheme. Thailand's reserves of natural gas, that the current generating capacity is built around, are running out. Over the next two years they will have to switch to purchasing gas on the open market. At current prices their costs will at least double, hence EGAT stating in 2013 that prices will rise by about 35% over the next two years. The price rise will almost certainly be less dramatic than that, but this will be by way of subsidy, not based on the true cost.

BTW The implication that the poor are somehow subsidizing the rich in their use of power is very wide of the mark. In the residential market larger users of power pay a progressively higher price based on usage. This higher rate subsidises the ability of EGAT to charge very low rates to low usage consumers.

I find this line "no investment by the government in new infrastructure" a bit misleading?

On the one hand you say that payback is 6-7 years, but EGAT will contract to buy for 25 years? That seems to me that EGAT is therefore committing to pay almost 400% of what the actual infrastructure is worth. The fact is that they will fund that by increasing the bills paid by residential users. Effectively you take money out of my pocket so you make a profit - pardon me for not liking that.

If solar could compete effectively in the market with traditional generation (Hydro, CCGT, OCGT, Thermal Coal) then it would not need any subsidy like this - by offering it you are forcing the use of a less-efficient solution. Let the market decide - if gas price rises significantly, EGAT can expand it's thermal production (currently 14.5% of the 32GW).

[Thai at Heart]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

There in lies the problem, the amount of red tape and general bullshit you have to go through to get the licensing and required permissions is enormous. Anecdotally I know 3 solar farm projects totalling over 2 Megawatt's that are literally siting there complete and ready to generate power yet they are still waiting on the red tape permissions from the government and relevant authorities.

I know quite a few people that are very keen on investing in the solar industry both throuh farms and the roof top schemes but they have been scared away by the red tape and there being no clear timeline for the completion of projects.

As far as I understand, the licences for farms have all been snapped up by your local neighbourhood pooyai awaiting your cooperative investment for a fee.

[Thai at Heart]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

Isn't that wonderful! EGAT will pay around 3 times what it is worth for energy from those rich enough to afford solar panels, and of course the rate paid by the poor and everybody else will increase (around 20% quoted??) to pay for it.

BTW if the plan was for 100 milliwatts, I wouldn't mind, 100MW is a different matter.

Pretty dim response. Not sure how 6.96 becomes 3 times 3.8, to use the lower figure. The householder pays for the panels and their installation, so there is no investment by the government in new infrastructure, no new power plant, no emissions in the 25 years (over and above those from the initial manufacturing process). The price rise is coming and has nothing to do with any solar scheme. Thailand's reserves of natural gas, that the current generating capacity is built around, are running out. Over the next two years they will have to switch to purchasing gas on the open market. At current prices their costs will at least double, hence EGAT stating in 2013 that prices will rise by about 35% over the next two years. The price rise will almost certainly be less dramatic than that, but this will be by way of subsidy, not based on the true cost.

BTW The implication that the poor are somehow subsidizing the rich in their use of power is very wide of the mark. In the residential market larger users of power pay a progressively higher price based on usage. This higher rate subsidises the ability of EGAT to charge very low rates to low usage consumers.

I find this line "no investment by the government in new infrastructure" a bit misleading?

On the one hand you say that payback is 6-7 years, but EGAT will contract to buy for 25 years? That seems to me that EGAT is therefore committing to pay almost 400% of what the actual infrastructure is worth. The fact is that they will fund that by increasing the bills paid by residential users. Effectively you take money out of my pocket so you make a profit - pardon me for not liking that.

If solar could compete effectively in the market with traditional generation (Hydro, CCGT, OCGT, Thermal Coal) then it would not need any subsidy like this - by offering it you are forcing the use of a less-efficient solution. Let the market decide - if gas price rises significantly, EGAT can expand it's thermal production (currently 14.5% of the 32GW).

Um.. That is basically it.

There was a super article this week in the press that a newly built power station I west wales produces as much power as every windmill put I so far in the uk.

With zero subsidy. Wind power I think has been debunked as twaddle. Its too pricy and too unpredictable.

[JRSoul]

EGAT has been running a scheme this year aimed at installing 100mW of solar panels on residential buildings. This will provide a feed-in tariff (FIT) of 6.96 THB/kW, as compared to an average cost to bigger consumers of 3.8-4.3 THB/kW. All power generated by the panels earns the FIT. The contract is for 25 years and is transferable if the house changes hands. This gives a payback of 6-7 years and a return on capital of more than 12% p.a. guaranteed for 25 years. This would be considered a healthy return on most investments. The problems are not the numbers or the business case. The first issue is a cultural one where Thais are averse to long-term investment and the second, and larger, issue is the amount of red-tape and conditions that have to be met to make a successful application. My company has managed to navigate a couple of householders through the process resulting in signed contracts with EGAT but it hasn't been easy.

Isn't that wonderful! EGAT will pay around 3 times what it is worth for energy from those rich enough to afford solar panels, and of course the rate paid by the poor and everybody else will increase (around 20% quoted??) to pay for it.

BTW if the plan was for 100 milliwatts, I wouldn't mind, 100MW is a different matter.

Pretty dim response. Not sure how 6.96 becomes 3 times 3.8, to use the lower figure. The householder pays for the panels and their installation, so there is no investment by the government in new infrastructure, no new power plant, no emissions in the 25 years (over and above those from the initial manufacturing process). The price rise is coming and has nothing to do with any solar scheme. Thailand's reserves of natural gas, that the current generating capacity is built around, are running out. Over the next two years they will have to switch to purchasing gas on the open market. At current prices their costs will at least double, hence EGAT stating in 2013 that prices will rise by about 35% over the next two years. The price rise will almost certainly be less dramatic than that, but this will be by way of subsidy, not based on the true cost.

BTW The implication that the poor are somehow subsidizing the rich in their use of power is very wide of the mark. In the residential market larger users of power pay a progressively higher price based on usage. This higher rate subsidises the ability of EGAT to charge very low rates to low usage consumers.

Save your insults for someone else. My degree and more than 20 years work experience is in electricity production, and I can spot a salesman who doesn't know a mW from a MW and quotes energy prices in kW rather than kWh.

Do you think that EGAT buys energy from other producers at the retail sales rate, or at near twice the retail sales rate? The wholesale rate of energy purchase will normally be about half the retail rate to allow for distribution costs.

Solar panels are not some miracle cure to the world's energy problems, and without massive subsidies they are barely an economic proposition. Raising the retail rate to cover those subsidies is a direct transfer of wealth from those who can't afford them to those who can, and that has happened in every country that has offered such subsidies AFAIK.

Australia is installing 2 solar power stations at huge costs, and critics of the scheme are estimating it will be the most expensive power ever produced in that country. This will inevitably lead to huge criticism of the (now out of office) government. Far better to disguise the cost with subsidised public schemes, though the subject of energy price rises is a very sore point there.

If you want to get technical, I am happy to discuss the low energy Out/In ratios of solar panels, the dismal capacity factor of around 27% for sun-tracking systems in a desert (optimal conditions), the output drops caused by dust coating or moisture intrusion, and the myriad other problems. Yes they save some fossil fuel usage, but one of the factors in energy pricing is flexibility and reliability of supply where solar sucks.

Would you put solar panels on your roof to pay for your own a/c if subsidies and incentives were not available?

[Alex Williams]

Currently, Maine is the only state in New England without a solar energy policy. It doesn’t make sense to say goodbye to that industry, especially at a time when it has the potential to prosper. Between 2012 and 2013, photovoltaic installations grew 41 percent nationwide, according to the Solar Energy Industries Association. compare electricity rates at Shop TX Electricity.